Right here and now, my buying the SP500 on the 715 line looks like it was 1% too early, but I am rarely accused of moving “too late” - closing prices are what matters here, and anything south of 708 is a 3 standard deviation move on the immediate term duration model that I am using. Unless something catastrophic happens overnight (oil wouldn’t be trading down like this if there was a terrorist attack in the works), there is a very high probability that we see a meaningful bear market bounce in the coming hours of trading.
Below I have outlined the line that I think we can bounce too first – 757 (dotted red). That would be +7% from the 705 we are currently trading at. That’s plenty enough for me to be buying SPY here.
Let me be clear - oversold immediate term bear market bottoms should be rented, not owned.
Keith R. McCullough
CEO & Chief Investment Officer